Digevo: bringing digital evolution to LATAM Exclusive interview with president Robert Musso

Roberto Musso, Digevo

Exclusive interview with Roberto Musso, founder and president of Digevo Group, a Chilean digital start-up group, about the successful development of his company over the past 26 years, the real meaning of the concept of ‘digital transformation’ and his secret to balancing his work and family responsibilities.  

Robert, let’s begin with how and why you founded Digevo in 2005?

The group acquired the Digevo brand in 2005, but the story actually started much earlier. The first technology company I founded was STI in 1997 because, in that year, the internet was just arriving in Latin America and I saw the opportunity to start developing internet connectivity in Chile and then from Chile to the region. We essentially created the websites of all the major banks at that time, which were very important for the financial sector, which was then also just starting to build their online positioning. That was our first technology company, which was later acquired very quickly by a Spanish multinational that wanted to enter Latin America.

With renewed enthusiasm and now more capital, we continued to build new companies, each with its own name and dedicated to different things. However, around 2005, a friend said to me, “hey, what you are doing does not work well because when two of your companies approach the same client separately, the client does not realize both are actually from the same group. You have to develop a unique brand.”

Thus, in 2005, Digevo Group was founded to bring together all the companies we had founded. The word ‘Digevo’ stands for ‘digital evolution’. For the past 25 years, we have been developing digital businesses throughout the region, leveraging on the newest emerging technologies available. We currently operate in 14 Spanish-speaking Latin American countries, and we also have an office in Miami. We offer services both for individuals with digital subscription models, as well as for companies through the ‘Software as a Service’ (SAAS) model. We work in many areas, but particularly in connectivity, marketing and Industry 4.0.

Throughout these 25 years, we brought in internet technology, which was still very young back in the 90s, and, ten years later, we specialised in mobile technologies, growing with them as they developed, trying to capture all the opportunities they brought, hand in hand with telecommunications companies in the region. Today, all the best-known mobile operators in the region are our partners, a fact which had allowed us to expand throughout Latin America.

Within the digital space, what are your areas of focus?

In the past five years, we have been very focused on artificial intelligence (AI). We design solutions that enable companies to improve their results using innovation, technology and digital transformation. In general, we work with the big players in the market. We understand that we have to get closer to our clients’ businesses to understand them well and thus support them better, since our clients are not interested in analytics for its own sake, but rather in the results and benefits it can bring to their business

We have natural language processing (NLP) and predictive models that can be applied to collections and sales processes. We have proprietary technology that we are using to support specific areas of the development Smart Cities and also in some specific retail applications. In the latter industry, we have agreements with shopping centre and supermarket operators to apply computer vision to collect data from their physical spaces and optimise the user experience.

We believe there are also great opportunities in traditional industries such as aquaculture, agriculture, forestry, mining, energy, etc., which are also starting to see the value of digital transformation.

What challenges did the group face in its regional expansion, which is something that is not generally so common for Latin American companies to do?

We faced all the challenges you would expect when expanding. But frankly, we found that international expansion was much easier than one would expect in Latin America.

Probably the problem was more of our mindset than anything else, because the reality is that when one operates in Spanish-speaking Latin American countries, the culture is very similar, the language is the same and the problems are very similar. As a consequence, the way of they organise themselves is very similar. All Spanish-speaking Latin American countries are very similar, so the truth is that digital expansion – because our services are 100% digital – is not so difficult. Of course you have to form companies in each country and resolve tax problems, develop commercial positions, design international products to handle currency and other particularities – all of which we absolutely did. But these are generally things you expect when you are present in multiple countries. Beyond those aspects, we did not face many problems, especially since we have always operated digitally.

Do you plan to expand further to other regions?

Probably, although we are a bit behind because of the pandemic. The most natural market for us is Spain because we are Spanish-speaking. Without major changes to our operations, we can enter the Spanish market, which is in fact what we are doing today.

The other natural market is the United States, as there are many Spanish-speaking people there who are interested in consuming some of our services. Obviously, we can also prepare our products for other languages, but the natural thing to do is to take the first step in Spanish.

That said, the truth is that Latin America is a big market, with over 600 million people with many digital needs. We believe we can continue to grow with a singular focus on Latin America.

Moving on, the field of AI has changed a lot in the last 10 to 15 years. How has AI advanced in Latin America in general?

To be honest, we are lagging behind the development that has taken place in the United States, in Asia and especially in China. This is probably because the massive level of connectivity that we have is very recent, dating back only to 2014 or 2015.

Therefore, we could say that Latin America is just emerging from the era of connectivity development, so all the talk of connectivity and digitalisation only started to emerge very recently. Companies and organisations have only recently started to move towards digital ways of operating and strategize plans to adopt AI and other new technologies. While some companies are very advanced, most are lagging behind in terms of AI adoption.

AI can provide an incremental improvement on existing forms of doing business or cause a major foundational change. The latter is more ideal because AI is about changing how you do something. The nature of the change has to be strategic and, in that sense, frankly, there has been very little progress in the region.

We can define two main groups across Latin American countries. The first is the group of business managers, who are typically middle-aged executives without a digital background. Their understanding of AI at the technical level is not very high and that implies that, at the strategic level, their understanding of AI is not very high either. As this group is the same group that makes the decisions in Latin America, we suffer from a structural delay in advancement.

However, they are generally smart people who are very knowledgeable about what is happening in their industry and in the world. They have already started to look at the globalisation of digital natives like Alibaba, Amazon and MercadoLibre, as well as the initial impact of AI developments in their own markets. Thus, their interest in the applications of new technologies is beginning to awaken, and, consequently, their interest in adopting and driving the AI movement in their own companies is growing. We have seen in the last couple of years that digital specialists are starting to be included on the boards of directors of large companies, which is great news.

On the other hand, the second group comprises computer engineers and data scientists that are just emerging from universities, who do understand the concept of AI and have been trained in it. But we still have a low volume of these professionals, unlike in Asia, for example. Furthermore, if you look to combine that AI knowledge with entrepreneurship experience, the pool of potential AI entrepreneurs shrinks even further. We need to significantly increase the number of professionals trained in AI and dynamic entrepreneurship if we want to create more technology start-ups.

Now with COVID, digital technology has become much more important for companies of all sizes. Having worked with many companies, what are some of the misconceptions about digitalisation and AI?

It is true that I have come across people who do not fully understand the ideas of digital transformation. One of the most misunderstood concepts is that digitalisation allows you to do the same things you did before, just digitally. This is obviously not digital transformation. This lack of deep and strategic understanding has been a barrier to our progress so far, but gradually the process of digitalisation is being better understood and companies are starting to reform their business models not just to do the same as before ‘digitally’, but to find new products, new operational models and new business models that are suitable for a digitalised environment.

Talking about the issue of digital transformation in general, have Latin American governments helped it? What about in Chile specifically, which I understand has a much more educated and stable government?

Unfortunately not at the necessary. It has to be understood that the political situation in all Latin American countries in general is very effervescent. Latin America, like many countries in the world, has had its fair share of social unrest. This has in part been boosted by increasing digital connectivity, since people connect to share their dissatisfaction and subsequently coordinate to organize protests and social uprisings. If we add to this the problems associated with the pandemic and its negative economic impact, I think governments in the region are generally kept busy with these extremely short-term and urgent priorities.

Only recently have countries in Latin America started to formulate proper AI policies, while places like United States, Europe and Asia have had AI policy frameworks for a while now. AI is still not considered a priority issue, which shows in the fact that even many children in rural schools do not even have Internet connectivity.

On the more positive side, in many countries there are now agencies that promote both digital entrepreneurship and entrepreneurship in general, which has been very encouraging. Also, many governments and states have adopted digitalisation to make their public service processes more efficient, which could continue the digitalization trend.

In Chile specifically, there are a series of social and economic problems occupying the current agenda. Moreover, over the last few years, we have tended to look almost exclusively inwards, paying little attention to the outside world and its development. On the mass level, beyond the expert elites, we are somewhat oblivious to the strategic advance of information technology at the global level. So part of my personal task, and that of Digevo, is to provoke interest in what is happening in the rest of the world while providing the conceptual and technological means to accelerate the adoption of AI. Otherwise, being unprepared will affect our growth and development. In short, although Chile has made its efforts, I would not say that it stands out in terms of its level of digitalisation compared to the rest of the continent.

You have also published a couple of books on a new model of entrepreneurship for emerging markets – what is it and why do emerging markets need it?

When I had the opportunity to become an entrepreneur in the late 1990s, I had to deal with the challenges of creating a start-up without much knowledge. There was not much literature on start-ups and the little that was available emerged only very gradually from Silicon Valley or Europe. When I tried to apply these techniques, I realised that they did not work because the environment in a developed country is very different from the Latin American environment, for example, in terms of financing possibilities, which are very massive in developed countries and not so in emerging countries; in terms of banking systems, which are poorly developed in emerging countries, and so on. All this, in addition to the fact that the types of problems we have here are different from those that start-ups in developed markets deal with, made it clear that simply replicating their methodologies was not going to work. The creation of start-ups must be more adapted to our realities. To solve this problem, we focused on developing a methodology that was suitable for emerging countries.

One of the main ideas was that, in emerging countries, in the absence of high levels of funding, the entrepreneur has to focus on the breakeven point as the top priority, which is where more than 90% of entrepreneurial projects fail – an incredibly high rate. In understanding this and trying to avoid it happening to us, we developed a series of techniques and considerations to deal with the risk of running out of funding and losing our businesses as a result. This idea is present across both of my publications I have written, ‘The Valley of Death‘ and ‘The Start-up Journey‘.

Fortunately, the methodology I developed was adopted by CORFO, the Chilean state development agency, as the basis of its policy to promote and finance local entrepreneurship. It then began to be replicated in several countries in Latin America, after which it grew in maturity both in the entrepreneurial environment and in mindset, greatly influenced by the creation of Startup Chile, which is an accelerator that seeks to motivate the creation of start-ups in the country.

Finally, a slightly personal question: you have six children and also a large number of roles and responsibilities in addition to being the president of the Digevo Group. How do you manage the balance between work and family life?

I fight against disequilibrium on a daily basis! I am very lucky because my family helps me a lot. They leave me a lot of time for my work at Digevo and as a professor. But, of course, I take care of my family duties, for example supporting my children in maths. I am always available. The balance is a challenge because nowadays, especially with the possibility to connect anytime, anywhere, it is easy to become too accessible to your work responsibilities. Therefore, you have to balance your personal and family activity with your business activity. Having been working for so long, I know all too well that you cannot be successful in business if you do not balance it with your personal and family responsibilities at the same time – both areas nourish each other.